Marshalls sales slide as landscaping hit by housing slowdown

Building materials firm Marshalls has revealed a slump in sales amid “challenging” trading in landscaping.

However, the FTSE 250 company said it was “cautiously optimistic of a modest recovery” over the rest of the year, as it held its financial guidance.

Bosses said they hope to see new work supported by the “new Government’s commitment to increase housebuilding significantly”.

To their credit Marshalls has not stood still, taking decisive action, cutting personnel and slashing shareholder returns in a bid to improve efficiency and lower the company’s debt, which despite the challenges facing the business, they have been successful in doing

On Monday, Marshalls reported that revenues declined by 13% to £306.7 million for the six months to June 30, compared with the same period a year earlier.

The company said this was largely driven by its landscape products business, which was dragged down by low levels of new-build housing and reduced spending on private housing improvements.

Meanwhile, revenues in its roofing business contracted by 5% but were slightly stronger than predicted.

Marshalls also revealed pre-tax profits grew by 29% to £21.5 million for the half-year, after cost reductions over the past year.

Matt Pullen, chief executive of Marshalls, said: “The group has delivered a resilient performance in weak end markets.

“The result in the first half is encouraging and demonstrates that the strategy of diversification, building on the group’s historic core landscape products business, through the acquisition and improvement of less cyclical businesses in recent years, has resulted in a more balanced group.

“We remain cautiously optimistic of a modest improvement in the group’s end markets during the second half of the year predicated on a progressive improvement in the macroeconomic environment.”

Mark Crouch, market analyst at investment platform EToro, said: “Marshall’s shares have performed well this year, up over 15%.

“This morning’s earnings update however indicates the Yorkshire construction firm is under mounting pressure with demand for UK housing floundering and inconsistent.

“To their credit Marshalls has not stood still, taking decisive action, cutting personnel and slashing shareholder returns in a bid to improve efficiency and lower the company’s debt, which despite the challenges facing the business, they have been successful in doing.”

Shares in Marshalls were 2.2% lower in early trading.